Sonic Solutions F4Q09 (Qtr End 03/31/09) Earnings Call Transcript

Sonic Solutions (SNIC)

F4Q09 Earnings Call

May 28, 2009 4:30 pm ET

Executives

Nils Erdmann – Investor Relations

Dave Habiger – President and Chief Executive Officer

Paul Norris – Executive Vice President, Acting Chief Financial Officer and General Counsel

Analysts

Ralph Schackart - William Blair & Company, L.L.C.

Matthew Andrews - Kaufman Bros.

Steve Sullivan - Horizon Financial Group

Presentation

Operator

Good day and welcome to the Sonic Solutions fiscal year 2009 fourth quarter earnings release conference call. As a reminder today’s conference is being recorded and will last approximately 60 minutes.

Now at this time I’d like to turn the conference over to Mr. Nils Erdmann. Please go ahead sir.

Nils Erdmann

Good afternoon and thank you for joining Sonic Solutions earnings conference call for the fourth quarter and fiscal year ended March 31, 2009. I’d like to inform all participants that this call is being recorded.

With me on today’s call are Dave Habiger President and Chief Executive Officer, and Paul Norris EVP, acting Chief Financial Officer and General Counsel.

Before I hand the call over to Dave, I’ll review our Safe Harbor statement. During the course of this call we may make forward-looking statements within the meaning of the Federal Securities laws. All statements other than those of historical fact are forward-looking statements including but not limited to those regarding growth and financial performance, financial outlook, strategic and operational planning. All forward-looking statements are made as of today based on current information and expectation and are inherently subject to change. We ask that you review these cautionary statements in today’s press release and refer to Sonics’ recent filings on Form 10-K and 10-Q for more detailed discussions of the relevant risks and uncertainties that would cause actual results to differ from these forward-looking statements.

Except as required by law Sonic Solutions undertakes no obligation to review or update any forward-looking statements. In addition, unless otherwise noted, we will present financial information on a non-GAAP basis. These non-GAAP measures should be considered as supplemental to and not as a substitute for or superior to the corresponding measures calculated in accordance with GAAP. While we believe that the non-GAAP measures provide information that is useful to investors, we recommend a careful review of the reconciliations between GAAP and non-GAAP measures provided in today’s press release as well as the detailed disclosures related to the purpose of and limitations on non-GAAP disclosures.

Today’s press release as well as a replay of this conference call can be found on the Sonic website at www.sonic.com under About Sonic, Investor Relations.

With that I’d now like to introduce Dave Habiger.

Dave Habiger

Thanks Nils and welcome everyone. I’ll start by recapping some of the events of the fourth quarter and fiscal year 2009. I’ll then turn the call over to Paul for a discussion on our financial results [inaudible]. Finally, I’ll briefly talk about the upcoming year and how we see Sonics business progressing.

For the fourth quarter Sonic generated revenues of $32.2 million and our gross margin was 74% and our operating expenses were $20.9 million. Operating income was $2.9 million and non-GAAP fully diluted earnings per share were $0.05. Adjusted EBITDA totaled $3.5 million. Even on a GAAP basis Sonic made a small profit, $0.01 per share. These results were significantly ahead of our guidance and analysts projections.

The strong finish to our fiscal year was due to two factors. First we had higher revenues in our Roxio brand and software business. OEM sales were a bit more robust and our direct to consumer sales in those bricks-and-mortar retail and over the web sales showed more strength than we’d anticipated. And second during the March quarter we began to see the full impact of restructuring and reorganization that we started last fall.

If you look at our financial statement the company’s operating expense line has been reduced by over $6 million per quarter on a non-GAAP basis from the level we were running in the first quarter this year. In rough terms that’s over a 20% reduction. The combination of reduced costs and better than expected revenue line produced a modest profit in spite of a very challenging economic environment.

Paul will now talk about our fourth quarter and full year financial results. He will also discuss that as we enter what has been the seasonally weak part of our annual cycle, we’re going to maintain our cautious stance with regards to our financial outlook. We plan to be conservative in our revenue projection and will continue to reduce our costs. Our goal is for Sonic to generate a cash profit in the upcoming fiscal year even as we invest in positioning Sonic for growth that we expect will resume when economics improve. Paul?

Paul Norris

Good afternoon everyone and thank you for joining us today. As Dave mentioned, for the March quarter our net revenue was $32.2 million. This was ahead of our guidance and analysts’ consensus. Our premium content division which includes our professional products group, CinemaNow, Qflix and CE licensing, contributed $4.1 million during the quarter. Professional systems bookings were down sequentially as the tight credit market continued to drag down sales of our Blu-Ray offering tool. Our CE licensing revenue was up significantly due to annual contract renewals and we enjoyed our first full quarter of CinemaNow revenue.

Roxio’s consumer revenue was $28.1 million in the March quarter, up 20% from the December quarter. Our consumer revenue figure was positively impacted by the timing of our Toast 10 Titanium launch in March as well as the continuing success of our Easy VHS to DVD software. Combined OEM and enterprise revenue was up 18% from the December quarter with both channels delivering better than expected results in sequential growth.

Dell revenue was relatively flat compared to the December quarter while revenue from HP and Sony grew over the prior quarter.

Cost of revenue for the fourth quarter excluding stock-based compensation and the amortization of intangibles was $8.5 million or 26% of revenue. Amortization of intangibles was approximately $100,000 in the March quarter, down significantly due to the write-off of intangibles that we took in the December quarter.

Operating expenses were $20.9 million in the March quarter, down from $23.8 million in the December quarter. Our GAAP operating expenses break down as follows. Sales and marketing costs totaled $7.7 million, down 11% from the prior quarter. Research and development costs totaled $8.1 million, down 8% from the prior quarter. And general and administrative costs totaled $5.6 million, down 16% from the prior quarter. These numbers include $576,000 in share based compensation. However, they do not include $1.3 million in restructuring charges relating to the headcount reduction we announced in January.

Our non-GAAP net income for the quarter was $1.5 million or $0.05 per fully diluted share. At the end of the quarter we had approximately 26.6 million basic shares outstanding and 26.8 on a fully diluted basis, up slightly relative to last quarter.

We often discuss adjusted EBITDA to better facilitate understanding of our operating results. Adjusted EBITDA is comprised of our earnings before interest, taxes, depreciation and amortization, excluding impairment charges, restructuring expense, stock option review expense and share based compensation. Our fourth quarter 2009 adjusted EBITDA was $3.5 million.

For the full 2009 fiscal year we generated $120 million in net revenue, a net loss of approximately $4.3 million and a $0.15 loss per share. Our gross margin was 75% and our operating margin was negative 5%. Adjusted EBITDA for the full year was negative $3.6 million.

Turning to our balance sheet cash, restricted cash, cash equivalents and investments ended the quarter at roughly $20 million, down from $25.6 million at the end of the prior quarter. The decrease in cash is partly due to expenses related to our headcount reduction and the acquisition of CinemaNow. It’s also due to software licensing receivables that we booked near the end of the quarter and that we expect will be paid in due course. We ended the quarter with accounts receivable of $14.9 million, up from $10.2 million at the end of December. DSOs at the end of March were 42 days, up from 35 days at the end of the prior quarter. We expect that DSOs will decrease by the end of June and that cash should be flat to slightly up at the end of June.

Now I’d like to turn to guidance for the first quarter of our 2010 fiscal year, the quarter ending June 30. As Dave mentioned while we’re pleasantly surprised by the revenue levels we experienced in the March quarter, we think it’s better to be cautious in projecting upcoming financial results. We see the industry continues to exhibit weak performance and a significant amount of our personal content revenue is tied to our OEM channel. But as I think everyone knows the June quarter is usually seasonally our lightest quarter of the year. Accordingly, our revenue forecast for the first quarter is for revenues of approximately $25 million.

We estimate that gross margins for the first quarter, including amortization of intangibles and stock-based compensation, will be down slightly on a sequential basis and operating expenses will continue to decrease over the next several months as we continue to remove costs from our operations. For the June quarter we anticipate non-GAAP operating expenses will be slightly more than $20 million and that adjusted EBITDA will be approximately negative $2 million.

Though we do not generally provide specific guidance beyond the upcoming quarter, I can tell you that we believe Sonic looks to break even in adjusted EBITDA in the September quarter and that absent significant further deterioration in the macro environment, we believe Sonic will generate positive adjusted EBITDA for the whole of fiscal 2010.

Now I’ll turn the call back to Dave Habiger. Dave?

Dave Habiger

Thanks Paul. I’d like to recall for you some of the recent highlights in our business. As those of you who’ve seen our recent investor presentation know, we’ve reorganized Sonics business along two lines, personal and premium content. Our Roxio consumer division which we sometimes just refer to as Roxio includes all of our branded Roxio software, from applications to the management region and enjoyment of personal content. On the other side of the equation, our premium content division includes our professional offering applications, consumer electronics, imbedded software in our Qflix initiative and the recently acquired CinemaNow.

Over the past year our Roxio brand with its personal content product continues to grow market share, widening our lead over the competition. According to the latest data from the NPD group that tracks retail sell through in North America, Roxio applications finished April with 52.8% of market share and dollar volume. Roxio products drove three times as many sales as the closest competitor and this amount does not include sales at Costco, Sam’s Club and Wal-Mart where Roxio has category specific. In a very challenging environment Roxio retail sales were up 4.6% year-over-year, helped by the continued success of Easy VHS to DVD and growth in SKUs of Toast and Creator Ultimate.

But as you know, a significant percentage of our personal content software revenues derive from shipments of our software through PC OEMs. Since last fall the PC segment has continued to grapple with very difficult conditions. During the March quarter we continued to see a very challenging economic environment. PC sales were down significantly during the quarter. Unit sales were down 6.5% according to Gartner. And the hardest hit were sales of full line PCs from premiere suppliers developed economies. Precisely, a portion of the PC markets are software chipsets.

Given the challenges confronting our OEM segment, over the past several months we’ve worked hard to adapt our digital media’s software offering, drive additional revenue for our OEM partners and for Sonic. We’ve expanded our offering beyond our traditional focus of recordable CDs and DVDs. For example, we’ve begun shipping new versions of our system restoration application Back on Track, which is showing signs of significant come back among our OEM partners especially with the rapidly growing [inaudible] segment.

We’ve also begun introducing the first of what will be a series of digital media products that emphasize elegant user interfaces conjoined with the power of the web. The first of these, PhotoShow Touch, combines our award winning PhotoShow web application with a touch interface. Look for more of this kind of development over the coming months.

And we haven’t forgotten our traditional focus on Roxio media. We just released the new version of our CD DVD burning software called Roxio Burn to enhance the user experience as the industry shifts to accommodate a new version of Windows. We also continue to refine our Blu-Ray upper offering, taking advantage of the transition to Blu-Ray which now appears to be in full swing.

The net result is that our OEM business though smaller than a year ago but showing signs of improvement even in this challenging PC and retail environment. In the upcoming year we will be well positioned in the PC industry as it begins its recovery. Roxio will generate $80 to $90 million a year in revenue and will remain highly profitable, contributing tens of millions of dollars for portfolio overhead and strategic investment.

Right now to our other division. Over the past six months we’ve dramatically changed our company’s positioning by making a big commitment to premium content. We actually started this initiative a while ago when we introduced our Qflix [inaudible]. In November we purchased CinemaNow and combined it with the components of our technology licensing and professional authoring business to create premium content division. During the March quarter we have seen an extraordinarily high level of activity in this division and we believe strongly in the importance of this business for the future growth of Sonic.

As becoming part of Sonic, we’ve worked to transform CinemaNow to less of a station to a bundled or imbedded service [inaudible] PCs and consumer electronics. The shift is consistent with our traditional Roxio business model and we have been able to successfully leverage our relationships with PC and electronic manufacturers to sell HP, LG and Nintendo, Samsung and TiVo to provide CinemaNow services through their products.

As more devices offer delivery of premium content CinemaNow, the rate of adoption and the number of title offerings should continue to scale. Watch for announcements over the next several months as Sonic premium content services become imbedded in a large number of next generation connected devices, including advanced Blu-Ray players, smart TVs and PCs.

A key component of our premium content strategy is to partner with content publishers, particularly Hollywood studios. Studios recognize that digital distribution while quite small today promises to become the physical way content is distributed in the future. Over the past few months we’ve worked closely with studios to make their content available for systems now through CinemaNow systems. Some studios have fully embraced the idea that they have license to power digital distribution on web branded websites. For example, Warner Brothers and Lions Gate are each offering digital downloads of their content through their respective online stores powered by CinemaNow. These services are up and running and we expect to offer such services to our other studio partners.

We’ve also licensed our CinemaNow technology to Blockbuster for the powering and enablement of their online rental and download services, and we’ll still be powering Blockbuster brand stores rather devices.

Our premium content division is pursuing a huge number of opportunities to prepare for the wholesale transition of home video content distribution, physical distribution to the web. Looking forward we expect our premium content business to continue to grow both in terms of device penetration and as a percentage of revenue as usage builds.

Our investments in this area will lead to an increasing number of imbedded devices and subsequently scale and consumer adoption. Simultaneously, we see Qflix beginning to generate meaningful revenue from the format adoption by studios and OEM manufacturers. At present, our premium content business is still small but it promises to exhibit loads of growth. Every participant in the home video arena believes that the next decade will see digital delivery of video transition from being a curiosity to being the standard way video is delivered and consumed.

How rapid might this growth be? Well a recent study from Morgan Stanley projected that digital delivery transactions with home video will grow at a compound rate of over 100% per year over the next four years. We aim for Sonic to enjoy an increasing share of this market. Our goal is to set the stage for this fiscal 2010 to see Sonics premium content services and software everywhere consumers enjoy video.

I’ll summarize my thoughts on Sonic by recounting a conversation I had at a recent investor conference. I was asked, “Dave, in a nutshell, why should we invest in your company?” My response was, “Because we have a very profitable software business and on a standalone basis it would probably be valued well above Sonics per market cap. But we also have a business that is capable of generating double and maybe even triple digit revenue growth.”

If you can get those values in the growth business, Sonics still a great investment. If you give a reasonable value to the growth business, Sonic is an outstanding [investment]. We’d like to make fiscal 2010 the year that we deliver on the promise implicit in this statement. With the help of our employees and our partners and our shareholders, I believe we will.

Before we open the call to questions, I’d like to mention that next week on Friday, June 5, Sonic will have the privilege of opening the NASDAQ Stock Market and we will be conducting the ceremony with two of our high profile [software] partners who will be joining us on stage for the event. And this will coincide with news about a product offering that we will announce next week. And we’re thrilled to have an opportunity at the ceremonies forum to make the announcement.

So at this point we will open the line for questions. Operator?

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) Your first question comes from Ralph Schackart - William Blair & Company, L.L.C.

Ralph Schackart - William Blair & Company, L.L.C.

I have a couple of questions. First is related to stronger than expected strength in the Roxio business. Just curious what was driving that. I mean we all know that units were pretty tough. Was it your go to market strategy that was a little bit different, the attach rates were maybe a little bit better than you were anticipating? Just want a little bit more color on that if we could.

Dave Habiger

You know our retail bricks and mortar did quite well. We had a, we launched a new product called VHS to DVD that certainly produced higher revenues than expected. Our OEMs also were slightly better than we would have thought when we gave guidance in I guess it was, you know, January, February of this year. So both the OEM and bricks and mortar business held up during the, you know, tough economic times and I guess we anticipated that they would have been impacted a little bit more dramatically.

Paul Norris

Yes, Ralph, we also had stronger than expected performance from our institutional business, from what we call our DLP business where we’d actually, that had really slowed down in our mid-December quarter as I think companies put off spending. And we saw that rebound quite significantly in the March quarter which was a positive surprise.

Ralph Schackart - William Blair & Company, L.L.C.

And then on the premium content business, Dave maybe if you give us a little bit more color to the extent you’re comfortable disclosing. On CinemaNow how is the business trending, vis a vie, your original expectations? I know it’s still early innings here. Maybe if you gave just, provide some metrics on download trends by consumers, number of digital titles and then why are you seeing stronger than anticipated Qflix strength at this point?

Dave Habiger

On the premium content, Ralph, we will not be providing explicit or specific title counts or breakouts at this point. I expect that will change in the coming quarters and we’ll give you much more clarity on some of the metrics so you can understand that business more clearly. I think the one metric I’ll give you is that we’ve certainly seen the penetration and consumer demand grow. I think everyone in the industry is clearly seeing that there’s something happening and the studios are seeing it and anyone who’s been involved in this. We’ve certainly been involved in electronic sales now for in various ways for several years. And that’s starting to flow through. And title count and purchasing and certainly the ecosystem that we’re turning on from set top devices to Qflix drives, etc., is helping drive that.

Ralph Schackart - William Blair & Company, L.L.C.

And then on the Qflix?

Dave Habiger

Yes, let’s see on the Qflix, that’s, I can’t recall the exact question. I think you’re looking for a little commentary on it. It’s, I think as expected we’re, you know, executing on a three year plan that at this point is laying out as we anticipated. We’re starting to shift on internal drives now which is kind of the next stage of this process. We’ve gotten ecosystems to deliver to those drives and we’ve certainly been successful with the MOD side of the business.

Recently Warner Brothers has launched their service and that’s all using CinemaNow Qflix drives. And that in addition to Amazon has helped, you know, keep that MOD market moving forward and certainly the Qflix drives on the Dell PCs have been a welcome addition to the ecosystem.

Ralph Schackart - William Blair & Company, L.L.C.

And then sort of rounding out this discussion, on the pro business is there anything more specific causing the business to be down sequentially other than maybe the economy? Or are the studios not looking to maybe fire up the back catalog as much in Blu-Ray as maybe you or the industry originally anticipated? Is it purely the economy? I’m just trying to get some color on that as well.

Dave Habiger

I think it’s purely the economy. I think they’re firing and releasing the kind of titles we’d expect, but ultimately in this environment purchasing, you know, large capital expenditures are delayed as much as possible. So we’re not seeing a competitive change in the landscape, we haven’t seen any pricing changes. Certainly Blu-Ray continues to move forward and is being adopted by consumers at a healthy pace. So I would, we currently view that strictly as the economy.

Paul Norris

Yes, we’re hearing time and again from our customers that they’re just putting off sales and they’re chomping at the bit for the time when they can go forward. So it’s, it really does appear to be driven by the economy right now.

Ralph Schackart - William Blair & Company, L.L.C.

And then overall on Blu-Ray, I know it’s doing modestly better off of lower expectations, but from your vantage point what are you hearing from the studios and the OEMs and the people within the value chain?

Dave Habiger

I think most people are happy with the launch. Again the press has somehow built this up to, you know, has the expectation maybe that and this is not financial for us but the consumer press, that things have to happen much more quickly. Blu-Ray is on pace with standard disc and standard disc was one of the most successful, was the most successful consumer format ever on and above every metric. So I think the studios are happy with what they’re seeing. Title counts, players are going up, prices dropping and we’re certainly happy with what we’re seeing.

I think I’m most encouraged by the fact that what we predicted several years ago when we started working on Blu-Ray and HD and interactual was that essentially Blu-Ray players would be one of the devices that helped bridge electronic sell through. That you would find that consumers would, you know, buy a device if you got the price that, you know, in the $100 to $200 range and it’s not only to play back a disc but you deliver electronically content. So we built out an ecosystem for that and it seems to be happening. The LG player that it’s, you know, it’s just been released is one of the first to kind of demonstrate that model.

Operator

Your next question comes from Matthew Andrews - Kaufman Bros.

Matthew Andrews - Kaufman Bros.

So it’s a two part question and then maybe I’ll follow up with a third more macro thought. First to drill on a little bit more on Qflix drives, what kind of attach rates are you seeing with Dell and are these drives being sold to anybody else? Maybe an idea of the price points for these drives and what’s the timeframe in which you expect the prices to start to come down if at all? And then finally maybe if you could just finish off with your thoughts, I know you briefly touched on this on the call but your thoughts on digital distribution versus burn on demand.

Dave Habiger

Thanks Matthew. Let’s see, let’s start with the attach rate. We don’t give out the attach rate. Dell obviously doesn’t want us to provide that kind of information, but we’re happy with what we’re seeing. I think we’ve been encouraged and Dell has continued to add to moving that from an external device to an internal device. So clearly we’re both happy with the movie sales that that drives as well as the attach rate on those devices.

The price of the drive, I think there’s roughly a Dell charges a $10 to $20 premium last I checked for that drive. And I think your other question was, oh other, you should expect to see those drives showing up on other devices and PC manufacturers in the future.

As it relates to the how do we see electronics, I think it was how do we see electronics sell through digital distribution in the future. We certainly think it will be tied to burning. It won’t be exclusively burning but we have enough exposure and data to show that clearly when you let people own and burn a disc they are more inclined to purchase or rent a movie. That’s, you know, it doesn’t take a statistician to figure that one out when you look at the data that we have. So we know that, the studios know that, and it’s an important part of digital delivery going forward.

I think that we will see plenty of devices that Dell is offering. You know we’re the, I think we’re on more devices than anyone else right now last count as far as devices that don’t allow burning. So we have some exposure there and some experience and we are confident that the market is starting to transition and move towards a digital distribution or a DOD model. And I anticipate pricing will get more attractive over time and consumers are being educated by plenty of manufacturers on the merits of downloading and also the use models. So we think that is certainly not, we think that’s going to grow soon and at a healthy clip.

Matthew Andrews - Kaufman Bros.

So you would say that the digital distribution and burn on demand they complement each other.

Dave Habiger

I absolutely know they complement each other. Yes.

Operator

Your next question comes from Steve Sullivan - Horizon Financial Group.

Steve Sullivan - Horizon Financial Group

Yes Paul I was just wondering if you could give us a sense of how low SG&A can go as far as absolute dollars.

Paul Norris

Well as I mentioned we’re now just south of $21 million and we’re looking, I think you could expect over the next six months or so that we might get that down somewhere south of $20 million, $19 million, that range.

Steve Sullivan - Horizon Financial Group

Dave, can you talk about CinemaNow in a little bit greater detail as far as your Blockbuster relationship and other relationships that are in the works?

Dave Habiger

Sure. We’re a tool provider so it turns out to power electronic sell through in the ecosystem it requires a lot of the tools that we already have and have been working on for a period of time, but also new tools and a Cloud delivery mechanism which our CinemaNow offering provides. The relationship with third party manufacturers is that we are providing the software at the chip level, on the device, on the MAC and the PC for playback and purchasing consumption. Our professional tools are feeding that same Cloud to that same digital locker if you will. And Blockbuster who you know is by far the number one provider of premium content in the world is a very good partner and one we are helping power and enable their brand in store as they move forward with a lot of initiatives over the coming months.

So we anticipate they will continue to keep that brand and identity out there and transition with the market as it starts to grow.

Steve Sullivan - Horizon Financial Group

Last question, how do you achieve greater penetration at Hewlett-Packard and Sony?

Dave Habiger

Well we already stated they’re currently our customers, so that we already have penetration at HP with CinemaNow. They’ve already [machine] with our products and I think are happy with those products and I expect to, you know, it’s a longstanding relationship that we’d expect to expand and continue. Sony is a very large customer of ours and has been for the 18 years that I’ve been here and I absolutely anticipate that they will continue to work with us on all dimensions of our business from both professional, the professional offerings and the consumer offering.

Operator

And that does conclude our question-and-answer session. At this time I’d like to turn the call back over to the company for any closing remarks.

Dave Habiger

Well thank you. Thanks everyone for your time and we look forward to speaking with you next quarter.

Operator

And this does conclude today’s conference call. We appreciate your participation. You may disconnect at this time.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use prohibited.

THE INFORMATION CONTAINED HER IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY’S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY’S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY’S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at:

[e-mail] you.